BC Technology Group's (HKG:863) Wonderful 652% Share Price Increase Shows How Capitalism Can Build Wealth

We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. You won't get it right every time, but when you do, the returns can be truly splendid. Take, for example, the BC Technology Group Limited (HKG:863) share price, which skyrocketed 652% over three years. It's also good to see the share price up 87% over the last quarter.

We love happy stories like this one. The company should be really proud of that performance!

See our latest analysis for BC Technology Group

Because BC Technology Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 3 years BC Technology Group saw its revenue shrink by 0.7% per year. This is in stark contrast to the strong share price growth of 96%, compound, per year. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. At the risk of upsetting holders, this does suggest that hope for a better future is playing a significant role in the share price action.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at BC Technology Group's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that BC Technology Group has rewarded shareholders with a total shareholder return of 135% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 41% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for BC Technology Group you should be aware of, and 1 of them shouldn't be ignored.

We will like BC Technology Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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